Insolvency Practitioners

Insolvency Practitioners or IPs are authorised or licensed to carry out the formal procedures related with insolvency in the United Kingdom. He is authorised under the Insolvency Act 1986 to act as an office holder for individuals and companies as per pre-defined guidelines. Unauthorised insolvency proceeding as an office holder without proper IP license is a punishable offence as per the UK laws.

Function of an Insolvency Practitioner or IP
In cases of insolvency, be it individual or company oriented, the Insolvency Practition can act as office holder to look into the insolvent’s financial affairs. He is also responsible in certain cases to act as a liquidator to uphold the interest of the creditors based on their priority.

In cases of individual insolvency, the IP can function as trustee during the term of bankruptcy and also act as the intermediate receiver of the individual’s property. In IVA proceedings, the insolvency practitioner is normally assigned as the nominee or the supervisor and hence becomes the trustee under the arrangement deal. In cases of sequestration, the insolvency practitioner holds position of a permanent or temporary trustee who administers the financial condition of the individual. He is also at times appointed the administrator of a deceased insolvent estate for maintenance.

When the insolvency case is pertaining to company or partnership, the insolvency practitioner’s function becomes more like a liquidator who aims at selling the company assets to settle the creditor’s debt. He also sometimes acts as a provisional liquidator appointed by the court in times of forced winding ups. In an attempt to save the assets and interests of the company, an administration order might be passed during which the insolvency practitioner will act as the administrator who looks into the financial and business affairs of the company. He might also act as an administrative receiver in cases of pay-outs that are done to the creditors on a monthly basis by the insolvent. When a company enters into an IVA with its creditors, the presence of an IP as a nominee or supervisor is required to ensure legal binding of the voluntary arrangement. At times of partnership insolvency in a company, he acts as a trustee of a partnership to manage the bankruptcy assets.
In a nutshell, they normally perform an independent assessment of the company’s position and also aid in providing comprehensive data for the different methods that can be incorporated in your financial condition along with their impact or implications. They also provide advice on the steps or actions that can be taken in cases of individual or company insolvency in an impartial way.

Insolvency Practitioners eligibility and Authorization
The Insolvency practitioners normally have a background in accountancy or law, but is currently not required to have either as this profession has a direct entry system incorporated by the 1986 laws. Individuals aspiring to become IPs need to pass a set of three examinations that is set by the Joint Insolvency Examination board (JIEB) and also to meet a pre-defined experience level.

The IPs are normally appointed by the IPA or the Secretary of State for Trade & Industry or by any other recognised body that is mentioned to possess authorization to appoint IPs as per the Insolvency Act 1986.
Once appointed they are also subject to inspection by the DTI Insolvency Service and DETI Insolvency service acting for the Secretary of State for Trade & Industry and the Secretary for State. They are also monitored by an annual review process and by means of inspections once every three years. These inspections focus mainly on the IPs professional standards, value and quality.

The Insolvency practitioners are required to adhere to certain standards to maintain quality and standard. They are required to comply with the statements of Insolvency Practice and act according to the professional and ethical code outlined by it. They are also required to follow the guidelines and standards issued by the practice. They are expected to continue professional education to keep up with the industry standards. The insolvency practitioners also need to follow the DTI Insolvency Service bulletin, ‘Dear IP’.

Steps to find an Insolvency Practitioner or IP
An Insolvency practitioner can be hired independently or can be appointed by means of a court procedure. To find an IP, you can perform a search in an IP Directory Guide provided online by many insolvency service websites. You can choose an insolvency practitioner by drilling down to your area or even look for details of IP based on his name.

The IPs appointed act in an impartial and genuine manner, but in case you feel that an insolvency practitioner is acting unethically or unprofessionally, you are free to make a complaint to the concerned authorising body. The Secretary of State can look into the complaint against IPs appointed by him but in no way can he interfere with an individual case or determine to guide or modify the decision of an insolvency practitioner. However all complaints regarding the remuneration of the IP will be discarded by the authorised bodies as long as the fee is approved as per the law and any matters on this regards need to be resolved in court.

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